AAR CORP (AIR) Stock Fundamental Analysis
USA - New York Stock Exchange - NYSE:AIR - US0003611052 - Common Stock
105.66 USD
-2.08 (-1.93%)
105.39 USD
-0.27 (-0.26%)
Taking everything into account, AIR scores 5 out of 10 in our fundamental rating. AIR was compared to 73 industry peers in the Aerospace & Defense industry. Both the profitability and the financial health of AIR get a neutral evaluation. Nothing too spectacular is happening here. AIR has a decent growth rate and is not valued too expensively.
1. Profitability
1.1 Basic Checks
- AIR had positive earnings in the past year.
- AIR had a positive operating cash flow in the past year.
- In the past 5 years AIR has always been profitable.
- Each year in the past 5 years AIR had a positive operating cash flow.
1.2 Ratios
- The Return On Assets of AIR (2.90%) is comparable to the rest of the industry.
- AIR has a Return On Equity (6.03%) which is comparable to the rest of the industry.
- Looking at the Return On Invested Capital, with a value of 8.32%, AIR is in the better half of the industry, outperforming 71.23% of the companies in the same industry.
- The Average Return On Invested Capital over the past 3 years for AIR is in line with the industry average of 8.56%.
- The last Return On Invested Capital (8.32%) for AIR is above the 3 year average (7.36%), which is a sign of increasing profitability.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 2.9% | ||
| ROE | 6.03% | ||
| ROIC | 8.32% |
ROA(3y)2.32%
ROA(5y)2.84%
ROE(3y)4.33%
ROE(5y)4.83%
ROIC(3y)7.36%
ROIC(5y)6.95%
1.3 Margins
- AIR has a Profit Margin (3.17%) which is comparable to the rest of the industry.
- In the last couple of years the Profit Margin of AIR has grown nicely.
- With a Operating Margin value of 9.40%, AIR perfoms like the industry average, outperforming 58.90% of the companies in the same industry.
- AIR's Operating Margin has improved in the last couple of years.
- With a Gross Margin value of 19.29%, AIR is not doing good in the industry: 64.38% of the companies in the same industry are doing better.
- AIR's Gross Margin has improved in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 9.4% | ||
| PM (TTM) | 3.17% | ||
| GM | 19.29% |
OM growth 3Y14.65%
OM growth 5Y34.25%
PM growth 3Y-52.86%
PM growth 5Y16.72%
GM growth 3Y3.32%
GM growth 5Y7.87%
2. Health
2.1 Basic Checks
- With a Return on Invested Capital (ROIC) below the Cost of Capital (WACC), AIR is destroying value.
- The number of shares outstanding for AIR has been increased compared to 1 year ago.
- AIR has more shares outstanding than it did 5 years ago.
- Compared to 1 year ago, AIR has an improved debt to assets ratio.
2.2 Solvency
- AIR has an Altman-Z score of 3.57. This indicates that AIR is financially healthy and has little risk of bankruptcy at the moment.
- AIR has a Altman-Z score of 3.57. This is comparable to the rest of the industry: AIR outperforms 47.95% of its industry peers.
- A Debt/Equity ratio of 0.61 indicates that AIR is somewhat dependend on debt financing.
- AIR has a Debt to Equity ratio of 0.61. This is in the lower half of the industry: AIR underperforms 65.75% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.61 | ||
| Debt/FCF | N/A | ||
| Altman-Z | 3.57 |
ROIC/WACC0.84
WACC9.96%
2.3 Liquidity
- A Current Ratio of 2.84 indicates that AIR has no problem at all paying its short term obligations.
- AIR has a Current ratio (2.84) which is in line with its industry peers.
- A Quick Ratio of 1.31 indicates that AIR should not have too much problems paying its short term obligations.
- AIR has a Quick ratio (1.31) which is in line with its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 2.84 | ||
| Quick Ratio | 1.31 |
3. Growth
3.1 Past
- AIR shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 26.72%, which is quite impressive.
- AIR shows quite a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 12.75% yearly.
- AIR shows quite a strong growth in Revenue. In the last year, the Revenue has grown by 15.40%.
- AIR shows a small growth in Revenue. Measured over the last years, the Revenue has been growing by 6.06% yearly.
EPS 1Y (TTM)26.72%
EPS 3Y17.57%
EPS 5Y12.75%
EPS Q2Q%31.11%
Revenue 1Y (TTM)15.4%
Revenue growth 3Y15.17%
Revenue growth 5Y6.06%
Sales Q2Q%15.92%
3.2 Future
- AIR is expected to show quite a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 16.18% yearly.
- Based on estimates for the next years, AIR will show a small growth in Revenue. The Revenue will grow by 1.07% on average per year.
EPS Next Y15.63%
EPS Next 2Y16.51%
EPS Next 3Y16.18%
EPS Next 5YN/A
Revenue Next Year17.8%
Revenue Next 2Y14.02%
Revenue Next 3Y11.37%
Revenue Next 5Y1.07%
3.3 Evolution
- When comparing the EPS growth rate of the last years to the growth rate of the upcoming years, we see that the growth is accelerating.
- The Revenue growth rate is decreasing: in the next years the growth will be less than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
- Based on the Price/Earnings ratio of 23.96, the valuation of AIR can be described as rather expensive.
- 90.41% of the companies in the same industry are more expensive than AIR, based on the Price/Earnings ratio.
- When comparing the Price/Earnings ratio of AIR to the average of the S&P500 Index (27.21), we can say AIR is valued inline with the index average.
- Based on the Price/Forward Earnings ratio of 19.96, the valuation of AIR can be described as rather expensive.
- 94.52% of the companies in the same industry are more expensive than AIR, based on the Price/Forward Earnings ratio.
- Compared to an average S&P500 Price/Forward Earnings ratio of 24.26, AIR is valued at the same level.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 23.96 | ||
| Fwd PE | 19.96 |
4.2 Price Multiples
- Based on the Enterprise Value to EBITDA ratio, AIR is valued cheaply inside the industry as 90.41% of the companies are valued more expensively.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | N/A | ||
| EV/EBITDA | 15.29 |
4.3 Compensation for Growth
- The PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a correct valuation of the company.
- The decent profitability rating of AIR may justify a higher PE ratio.
- A more expensive valuation may be justified as AIR's earnings are expected to grow with 16.18% in the coming years.
PEG (NY)1.53
PEG (5Y)1.88
EPS Next 2Y16.51%
EPS Next 3Y16.18%
5. Dividend
5.1 Amount
- AIR does not give a dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0% |
AAR CORP / AIR FAQ
What is the ChartMill fundamental rating of AAR CORP (AIR) stock?
ChartMill assigns a fundamental rating of 5 / 10 to AIR.
What is the valuation status of AAR CORP (AIR) stock?
ChartMill assigns a valuation rating of 4 / 10 to AAR CORP (AIR). This can be considered as Fairly Valued.
Can you provide the profitability details for AAR CORP?
AAR CORP (AIR) has a profitability rating of 6 / 10.
How financially healthy is AAR CORP?
The financial health rating of AAR CORP (AIR) is 4 / 10.
What is the expected EPS growth for AAR CORP (AIR) stock?
The Earnings per Share (EPS) of AAR CORP (AIR) is expected to grow by 15.63% in the next year.